Chapter 9 - Insurance for Households and Individuals Quiz

What is the primary purpose of insurance?

• To avoid paying taxes

• To increase the insured's wealth

• To provide financial protection against possible loss

• To make a profit for the insured

Which of the following is NOT a principle of insurance?

• Indemnity

• Guaranteed profit

• Utmost good faith

• Insurable interest

What does a premium refer to in insurance terms?

• The compensation paid to the insured

• The amount paid by the insured for coverage

• The deductible amount in a policy

• The total value of the insured item

What is the principle of indemnity?

• The insured is put back in the same financial position as before the loss

• The insured should profit from a loss

• The insurer pays double the loss amount

• The insured receives a fixed amount regardless of the loss

What does subrogation mean in insurance?

• The insured retains ownership of the item after compensation

• The insurer takes ownership of the item after compensation

• The insured can claim multiple times for the same loss

• The insurer pays more than the item's value

Which type of motor insurance is compulsory in Ireland?

• Comprehensive

• No-claims bonus

• Third party

• Third party, fire and theft

What is a no-claims bonus?

• A discount for not making any claims

• A penalty for making claims

• An additional charge for high-risk drivers

• A reward for insuring multiple vehicles

What does home insurance (buildings cover) protect against?

• Damage to the building structure

• Theft of personal belongings

• Loss of income

• Accidental damage to vehicles

What is the purpose of critical illness cover?

• To pay for routine medical check-ups

• To insure against job loss

• To cover the cost of minor injuries

• To provide a lump sum for serious illnesses

What is the role of a proposal form in insurance?

• To apply for insurance coverage

• To renew an existing policy

• To calculate the premium

• To claim compensation